Armenia’s Main Cellphone Network Paralyzed

Armenia’s Greek-owned telecommunications monopoly claimed on Monday to have so far failed to fully determine the cause of an almost three-week mysterious paralysis of its wireless network which has left hundreds of thousands of mobile phone users fuming.

The Armenian government, meanwhile, appeared to be losing patience with ArmenTel’s inability to remedy the situation qiuickly, with officials speaking of “sanctions” that could be imposed on the deeply unpopular operator.

“We have still not established the cause of the problem, but efforts to do so are continuing,” an ArmenTel spokeswoman told RFE/RL.

The official claimed that the situation has already somewhat improved. “It’s better compared to the first days [of the crisis],” she said. “While it was impossible to make any calls then, you can make some now.”

The claims mirrored a statement issued by ArmenTel last Thursday. It declared that “the cellular phone network is steadily improving.” However, making and receiving phone calls through what is still a tiny network by European standards remained virtually impossible both in the course of last week and on Monday.

The network’s sudden collapse began on July 1, coinciding with the long-awaited launch of Armenia’s second wireless system, VivaCell. ArmenTel promptly flew in telecom engineers from Greece and Germany to inspect its facilities but has still not provided a full and clear explanation for the breakdown.

ArmenTel’s Thursday statement cited a “flurry of phone calls” which it said followed a steep reduction of phone tariffs effective from July 1 and put the network under greater strain. The statement urged the increasingly furious subscribers to use their handsets more sparingly.

“Any attempt to make a call, for which there is no real need, simply reduces other subscribers’ and, at the end of the day, all subscribers’ ability to make phone calls,” said the statement.

Critics say ArmenTel, which is owned by Greece’s OTE telecom giant, is paying the price of its gross underinvestment in mobile telephony that has left Armenia lagging behind neighboring Azerbaijan and Georgia where the service has been more affordable and of higher quality.

Azerbaijan, for example, currently boasts 1.7 million cellphone users. In Armenia, there were less than 300,000 of them before the launch of the VivaCell network. The Lebanese-owned company has already attracted tens of thousands of subscribers through aggressive advertising and plans to bring their number to 300,000 by October.

ArmenTel responded by significantly cutting its tariffs last month. However, its underdeveloped network may well have failed to cope with the resulting increase in phone traffic. There have also been conspiracy theories about foul play on the part of VivaCell which has co-opted some of ArmenTel’s former senior executives and technical staff with higher pay. Relations between the two competitors have been uneasy.

The Armenian government demanded official explanations from ArmenTel earlier this month and assured the public that everything is done to get the cellphone back into shape. Transport and Communications Minister Andranik Manukian announced on Thursday that the problem will be solved within days.

“It’s hard for me to speak about this,” Manukian said on Monday with a sigh. “I am now in an awkward situation. I [wrongly] stated that the situation improved and the crisis is coming to an end.”

“Every day I demand that they quickly eliminate the flaws in their system,” he said. “If things continue likes we will apply sanctions which we are allowed to apply.” The minister would not be drawn on what concrete action the government might take.

The quality of mobile phone service provided by ArmenTel left much to be desired even before the unprecedented network failure. It was the main reason why the government decided to partly open the sector to competition last year.

Exclusive rights to all forms of telecommunication were a key term of ArmenTel’s 1998 sale to OTE, one of Europe’s largest telecom firms. Some former government officials who helped to negotiate the $200 million deal later admitted that granting the Greeks the monopoly was a serious mistake.

(Photolur photo: Members of a small pro-government party protesting outside the ArmenTel offices in Yerevan on Friday.)